Rishi Sunak said he was delivering a “fairer and improved transport system” by putting £150 million into bus services rather than the HS2 high-speed rail project.

The Prime Minister scrapped the northern leg of the HS2 scheme from Birmingham to Manchester, promising instead to put the money into hundreds of smaller transport projects.

The Government has now announced new funding for bus services in the Midlands and northern England in the first stage of a £1 billion investment plan.

Mr Sunak said it was the start of his “Network North” plan coming into action.

“We’re backing buses with one of the biggest ever support packages and keeping bus fares down to ensure the country’s favourite means of transport is more affordable for millions of people,” he said.

“This government is taking the right long-term decisions to deliver on our vision for a fairer and improved transport system by investing billions back into the transport projects that matter most to people and their communities.”

The largest single allocation is just over £16.6 million for the West Midlands Combined Authority, while £16.3 million will go to Greater Manchester and there is almost £13.4 million for West Yorkshire.

Local authorities and bus operators will be able to decide how to use the funding, but the Government said the cash was enough to support up to 25 million miles of new bus services across the North and Midlands.

That could mean reintroducing evening services, increasing the frequency of buses on busy routes or introducing new services to connect areas, officials said.

The Government also confirmed that the £2 cap on bus fares would be extended until the end of 2024.

Community services for older people and vulnerable passengers will also receive a 60% funding increase in the amount they can claim for fuel to help keep costs down.